Asian Session Forex Recap – Nov. 28, 2016

The Greenback started the week on a weak note, as a lack of fresh catalyst inspired forex traders to take profits from their long dollar trades.

Major Events:

End of a trend? – After dominating its major counterparts since Trump won the U.S. elections, the dollar’s rally hit a snag today. One possible explanation is that the combination of end-of-month profit-taking and cautiousness ahead of this week’s OPEC meetings and U.S. NFP releases are urging traders to close their long dollar trades.

China bucks the risk aversion theme – Data over the weekend reflected that industrial profits in the world’s second largest economy rose by 9.8% in October from a year earlier. This is faster than the 7.7% increase in September, and pushes earnings in the first 10 months of the year to a growth of 8.6% to 5.26 trillion CNY. Not surprisingly, the improvement in profits for China’s companies translated to a positive day for China’s markets.

The Shanghai index is up by 0.56% and Hang Seng is up by 0.61% even as Nikkei snapped its seven-day streak to trade 0.24% lower. Ditto for Australia’s A SX 200, which also slipped by 0.79%.

Slide in oil prices – The plot thickens ahead of the official OPEC huddle on the Wednesday! See, late last week Saudi Arabia, one of the world’s biggest oil producers and de facto OPEC leader, caused ripples in the oil market when it pulled out of an unofficial meeting, saying that talking with Russia and other oil producers is pointless without a clear decision yet from OPEC.

Fast forward to last weekend and it looks like Iran is also having second thoughts. Not only has it refused to give its thumbs up on a new proposal personally delivered by Algeria’s oil minister, but it has also called Saudi out, saying that it’s “waging a full a full-blown psychological war against Iran and a number of other OPEC members.” Where is the love, yo?

The decreasing prospect of a deal among the oil producers send the oil tumbling across the board. Brent crude oil is down by 0.27% to $48.11 while U.S. crude oil prices is down by 0.33% to $45.91.

Major Market Movers:

USD

– Dollar bulls took a breather today, as some forex traders decided to book their profits ahead of this week’s top-tier events.

EUR/USD is up by 40 pips (+0.38%) to 1.0652, GBP/USD jumped 47 pips higher (+0.38%) to 1.2512, and USD/CHF slipped by 19 pips (-0.18%) to 1.0098.

JPY – Uncertainty ahead of the NFP report and this week’s OPEC meetings inspired risk aversion and encouraged demand for the low-yielding yen.

More from our Blogs

Let's end this week's intraday charts update by checking up on our old setups for USD/CHF and CAD/CHF. Of course, we'll be looking for fresh setups as well. In addition, I've also got a new channel pattern for GBP/NZD. ...